Lessons from the Cambridge Analytica Scandal: Four Implications for Business

Stories about Cambridge Analytica have surged again, with the latest revelations that Cambridge Analytica exploited Facebook to harvest data from millions of people. Like many of these scandals it is likely that there is still more to discover about these companies and the characters involved.

Cambridge Analytica’s connection with media behemoth Facebook and use of data gleaned from Facebook’s platform has increased the scrutiny on methods used by what some would regard as shady organisations alongside the sheer scale of data collected by companies like Facebook.

The scrutiny of Cambridge Analytica is not new, nor are warnings about data protection and privacy online. What is clear is that there are important lessons for businesses to learn from the current scandal and public outcry.

Business Implications

1. Implications for privacy

Anyone who is unaware of the scale of data collected by the tech giants as well as smaller tech companies haven’t been paying attention for a very long time.

Any company that uses social media channels for connecting with customers or employees must remember that all of the data published online is either publicly available, or may be harvested by third parties. Once this information has been collected and then stored in in the cloud, there is always the possibility that some leak, hack or breach will rain hell down on that company.

All data that is shared, sent or stored online is potentially at risk. This can include breaches in customer data protection as companies like Sony and Talk Talk have experienced. This could include criticisms of how thirty parties can harvest and use information, like with Cambridge Analytica using Facebook data. Or it could be a rival company finding information that is useful. Data that is intended to be private online often becomes public, one way or another.

2. Impact on public opinion

When companies like Cambridge Analytica and Facebook get caught up in controversies about their data collection or data protection policies, public anger often ensues. Any number of companies, organisations or individuals can also unsuspectingly become caught up in the debate. The vast scale of data and connections involved in social media platforms means novel ways of accessing and using that data will continue to evolve.

Companies that become associated with privacy breaches can end up in a PR nightmare. Or companies that find novel ways of collecting and analysing online data may find themselves in a great deal of trouble when their methods become public knowledge.

3. Possibilities for manipulation

One of the key assumptions of any data collection is that the data one is collecting is accurate. To accurately assess people using their online behaviour we have to assume first that they are real people, and second that they are behaving in a genuine and consistent manner.

In politics, for example, if the Red Team is collecting large amounts of data in an attempt to target their message, the Blue Team can participate too. Why doesn’t the Blue Team disseminate information to disrupt the Red Team’s calculations? If the Red Team is funding messages from fake profiles, the Blue Team could easily create fake profiles to absorb the Red Team’s messages and trick their calculations. In the end, this is ends up as a very expensive (and ultimately useless) exercise which is very profitable for the advertisers.

Like any marketing exercise, the only way to determine whether marketing is successful is to track whether or not it ultimately affects behaviour.

4. Implications for Gamification

The revelations from Cambridge Analytica also have interesting implications for the emerging and popular ‘gamification’ industry. Gamification offers more complex, time-consuming and expensive artificial worlds to test people’s behaviours – while Cambridge Analytica and those like it have developed ways to assess people and their personality without taking any of their time (and in many cases, without their knowledge or consent).

Unobtrusive and automatic methods of analysing data that is already available offers a much quicker and more convenient way to assess people than gamification methods which require much more time and attention from the person being assessed.

Analysing real-world data of people’s actual behaviour can be a much more effective way of assessing people than getting them to play a game Arguably, social media companies have been “gamifying” social interaction since their inception. Likes, endorsements and social sharing already commodify and track people’s social interactions online.

Covertly analysing people’s real-world behaviour is already widespread, and may offer a far superior alternative to measuring artificial behaviour “gamified” environment. That is, if the issues of privacy and possible manipulation can be resolved.

The Real Impact

A common criticism of many social media campaigns is that a great deal of money and effort can go into campaigns which have very little impact. It is, of course, quite simple for anyone with the resources to bombard social media platforms with advertising. Even when these are extraordinarily well targeted, there is often little evidence that these activities lead to actual change in opinions or behaviours.

As we discuss in High Potential: How to Spot, Manage and Develop Talented People at Work (Bloomsbury, 2018) there is good evidence that the data collected on social media websites can be used to understand and profile people. Social media interactions can fairly accurately predict a person’s sexual orientation, gender, ethnicity and political leanings and personality traits.

There is less evidence to suggest that using this data to target individual opinions and behaviour actually works. Companies like Cambridge Analytica made big promises in attempts to attract large amounts of money for their business. But making extravagant claims to sell an expensive product is not a new phenomenon.